Almost every individual having a good income cherishes the dream of having his own home at some point of time in the near future. However, in most cases the fulfillment of this dream keeps on getting delayed as other familial and personal responsibilities gain prominence. Most people living in parental homes or homes that they might have inherited from other relatives do not feel much stressed about not having a living space they can truly call their own. On the other hand, people who live in rented accommodations are more concerned about getting a place of their own. If you also live in a rented home, then it is high time you chose to invest in an affordable property.
Buying Or Renting - Making The Right Choice
When faced with the question, most people tend to feel confused about what would be the right choice for them. While renting a house seems easier, it also brings along a sense of insecurity as you might have to change your home every few years. This creates a feeling of living like nomads besides creating other complexities like frequently changing the mailing address on important documents or even applying for passport, pan card etc., which have become quite vital in the modern age. Most importantly, you always tend to feel worried about having to dole out extra cash for repairing any major damages that might be caused by you to the rented property.
As far as buying a property is concerned, the biggest hindrance that you may face is to arrange the minimum down payment amount. In addition, you might also need to consider whether or not you will be able to pay the monthly EMI’s in time for the next several years, without choking yourself financially. At the same time investing in your own house saves enables you to get tax benefits, while also offering you the freedom of completing any pending work at your own pace based on the availability of funds. Most importantly you attain the freedom to live life according to your own rules and will without feeling the need to abide by the whims and aspirations of your landlord.
EMI’s Might Not Necessarily Burn a Hole through Your Pocket
One of the most common misconceptions that people have about buying a property of their own is that they would not be able to afford the hefty EMI’s. However, with the policies on home loans having changed significantly over the past decade, you can now opt for a minimal EMI scheme that suits your budget. In fact, most financial institutions today undertake a complete analysis of not only your current financial status but also your future growth prospects and repayment capability before devising a customized EMI Plan for you. In fact, State Bank Of India, which is the biggest government operated bank in the country, has also made it possible for loan seekers to extend the number of years over which they can repay the home loans and thus lower the EMI amount considerably.
In view of the above facts it would not be wrong to say that you can now easily invest buy a property of your choice and rather than paying the rent use the same amount for your EMI. As it is, leasing out two bedroom apartment in a good locality in any major city would require you to pay anywhere between 10,000 to 15,000or even more as rent. Using this amount to payback the home loan and enjoy the benefits of living in your own house is definitely an intelligent choice as compared to paying it to the landlord and making him richer.
Looking At The Bigger Picture
When it comes to choosing between paying the rent or paying EMI’s, going with the latter option is definitely advisable. This can be better understood by considering the following facts about both these options.
- Buying a house and paying EMI’s makes financial sense as you end up owning an asset whose price increases with passing time. On the other hand paying rents offers no such benefit.
- Paying EMI’s also offers indirect monetary benefits in the form of tax deductions, which are doubled in case of couples taking out a joint loan. In case of paying rent, you might actually have to share amount of applicable property tax with your landlord.
- You can choose to undertake any incomplete construction or finishing work in your new home as and when you have the finances for the same. However, in case of a rented accommodation, you might be required to carry out any serious repair works almost immediately.
- With the high rate of inflation, landlords might raise the rent by a significant amount after notifying you well in time about the same. However, the EMI value cannot be changed so abruptly and even in case of interest rate changes, you get ample time to rearrange your finances.
The process of paying the EMI’s is sure end sooner or later leaving you free to do whatever you like with that amount. However, paying the rents is a continuous process with the surely of the rent amount growing bigger with each passing year or even every change of accommodation.
The above factors make it quite clear as to why young couples today opt to purchase a home quite early in their life and career, leaving them with ample time to repay their home loan in a stress free manner. The key however, is to keep things simple so as to avoid any extra financial burdens at least until the time you can afford to extravagant in an effortless manner. Whether you intend to retain the same house for a lifetime or move to a bigger and better property should also be kept in mind while purchasing the first home so that you are not ties up in repaying the single loan amount for many years.